Putting a Price Tag on Paradise.

• Position: Stanford University study says conservation must be made profitable to succeed - Brief Article

Conservationists and corporations often do not see eye to eye. An environmentalist may argue that a rainforest should be protected for its inherent beauty, while a logging company executive might claim that the real worth lies in its cut timber. With such a wide range of opinion, is it ever possible to reach a consensus on the economic value of a rainforest? Yes, say 17 ecologists and economists in a Stanford (Calif.) University study.

"We must make conservation profitable," maintains Gretchen C. Daily, director of the Tropical Research Program at Stanford's Center for Conservation Biology, co-author of the study with Nobel laureate Kenneth J. Arrow, professor emeritus of economics; Paul R. Ehrlich, professor of biological sciences; and David Starrett, former chair of the Economics Department. She warns that time is running out for the planet, and those who want to save it must create economic incentives to do so. "Some might say this is an act of desperation that is doomed to fail," she concedes--an attempt to align almighty market forces with environmental conservation. "But we'll never save the environment on the basis of charity alone. We have decades of experience showing this. We need to create ways of rewarding people financially for protecting environmental assets."

"The world's ecosystems are capital assets," the researchers note. "If properly managed, they yield a flow of vital services, including the production of goods (such as seafood and timber), life support processes (such as pollination and water purification), and life-fulfilling conditions (such as beauty and serenity). Unfortunately, relative to other forms of capital, ecosystems are poorly understood, scarcely monitored, and [in many cases] undergoing rapid degradation and depletion. Often, the importance of ecosystem services is widely appreciated only upon their loss."

This is beginning to change, they say, particularly in Australia and Costa Rica. The firm Earth Sanctuaries, Ltd. now is listed on the Australian Stock Exchange, making it one of the world's first conservation companies to go public. The corporation, valued at $25,000,000, buys up land and restores native vegetation and wildlife, earning income from tourism, consulting, and wildlife sales. "The firm lobbied for and won a change in accounting law so as to include rare native animals as assets." Meanwhile, the Sydney Futures Exchange is positioning itself to be a global leader in the trading of ecosystem...